Ministry of Petroleum and Natural Gas Government of India. OALP Bid Round I DGH. January 18, 2018 New Delhi. Directorate General of Hydrocarbons

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1 Ministry of Petroleum and Natural Gas Government of India OALP Bid Round I DGH Directorate General of Hydrocarbons January 18, 2018 New Delhi

2 Indian Economy a beacon of growth and stability USD 2.3+ trillion economy One of the fastest growing large economies. GDP growth expected to rise to 7.3% in (World Bank) Foreign exchange reserves steadily growing since Recorded ~USD 400 billion as on Oct 2017 Jumped 30 ranks in World Bank Ease of Doing Business rankings 2017, driving investor sentiments. Recorded FDI of ~USD34 billion during Apr-Sept 2017 In all likelihood India is going to register higher growth rate than other major emerging market economies in the next decade : World Bank Source : World Bank, Reserve Bank of India, KPMG in India Analysis

3 GoI has undertaken a slew of proactive policy reforms to meet India s Energy Security Goals Availability & Upgradation of E&P Data Regulatory Framework for E&P Improved Market Access National Data Repository (NDR) Operationalised Appraisal of Unappraised Areas Survey of Offshore areas through Multi-client Speculative Mode Re-Assessment of Prognosticated Hydrocarbon Resources of India Hydrocarbon Exploration and Licensing Policy (HELP) Open Acreage Licensing Programme (OALP) Discovered Small Field Policy Good International Petroleum Industry Practices (GIPIP) Policies for reducing regulatory burden & contractual inflexibility in Production Sharing Contracts (PSC) New Domestic Gas Pricing Guidelines Pricing Policy for gas produced from Deepwater, Ultra deepwater and High Pressure High Temperature (HPHT) areas Full Marketing and Pricing Freedom under HELP, DSF & CBM Plans for Free Market Pricing through creation of Gas Trading Hub

4 Overwhelming success of the first Discovered Small Fields (DSF) round 134 e-bids received from 47 Companies 20 Companies awarded 30 Contracts awarded (23 Onland & 7 Offshore) of 777 sq.km. area Expected Cumulative peak production of 15,000 BOPD oil and 2 MMSCMD gas Cycle completed in record time of ~10 months Brief of FDP Total 8 FDPs have been submitted 1 FDP has been reviewed and 7 are under review/evaluation Highlights of the reviewed FDP o Expected that the Field will produce ~5000 bbl of oil and 15 mmscf of gas per day

5 OALP was launched under the flagship policy Hydrocarbon Exploration and Licensing Policy (HELP) Hydrocarbon Exploration and Licensing Policy (HELP) Open Acreage Licensing Reconnaissance Contract (RC) Petroleum Operations Contract* (POC) National Data Repository Salient Features Revenue Sharing Model Full Marketing & Pricing Freedom Fiscal Incentives Single License for all type of Hydrocarbons Freedom to carve out blocks Note: *Model Revenue Sharing Contract (MRSC)

6 Open Acreage License Process RC Contract Period* 12 years Investor studies G&G data available on NDR Carves out blocks for interested area for any of the two contracts POC Contract Period 8 to 10 years: Exploration 20 to 30 years: Development and Production Submission of EoI Key Points - Party submitting EoI for an area shall be Originator EoIs can be submitted in two cycles per annum (every 6 months) Finalization of Block and Invitation to Bid through NIO Bid Submission, Evaluation Award of Contract Legend - POC Petroleum Operations Contract RC Reconnaissance Contract EoI Expression of Interest NDR National Data Repository NIO Notice Inviting Offer Enabling Ease of Doing Business for E&P Investors through OAL Process Note: *Exploration period is for 2-3 Years

7 OALP Timelines Timeline (Closing Dates) Key Milestones Window 1 Window 2 15 th Nov 15 th May 31 st Dec 30 th June Jan April May June July Sep Nov Dec Cut off Date for Bid Rounds Finalization and Review of EoI Issue of Bid Document Bid Submission Deadline Bid Evaluation and Award (on or before) Contract Signing (on or before) Timing is critical to avail Originator s Incentive DGH to Evaluate EOIs and Issue NIOs ICB for the identified Blocks E-bidding portal Contract signing

8 Summary of EoIs received under 1st Cycle (1st July to 15th November, 2017) 55 EoIs for admissible Area of ~59,282 Sq. Kms. Deepwater 11% By Area Shallow Water 24% Onland 65% EoI Received for Onland Basin: 46 Rajasthan: 09 Krishna Godavari: 03 Cambay: 11 Cauvery: 01 Assam-Arakan: 19 Kutch: 01 Ganga: 01 Himalayan Foreland: 01 Shallow Water 14% Deepwater 2% By No. of EOIs EoI Received for Shallow Water Basin: 08 Kutch: 01 Saurashtra: 02 Cauvery: 02 Mumbai Offshore: 02 Krishna Godavari: 01 Onland 84% EoI Received for Deepwater Basin: 01 Krishna Godavari: 01 Note : 57 EoI received, One EoI is rejected & One EoI is Withdrawn

9 Note: Undiscovered resources are for the entire basin (excludes unconventional hydrocarbon potential) Inviting offer for 55 blocks with ~60,000 Sq. Km area under OALP Bid Round I A RAJASTHAN Blocks offered: 9 Undiscovered Resources: 3,188.0 MMTOE E ASSAM-ARAKAN Blocks offered: 19 Undiscovered Resources: 1,454.8 MMTOE B CAMBAY Blocks offered: 11 Undiscovered Resources: MMTOE A E F KRISHNA GODAVARI Blocks offered: 5 Undiscovered Resources: 7,578 MMTOE C GUJARAT KUTCH Blocks offered: 2 Undiscovered Resources: MMTOE C B G CAUVERY Blocks offered: 3 Undiscovered Resources: 1,672.2 MMTOE GUJARAT SAURASHTRA Blocks offered: 2 Undiscovered Resources: 1,246 MMTOE H GANGA BASIN Block offered: 1 Undiscovered Resources MMTOE D MUMBAI OFFSHORE Blocks offered: 2 Undiscovered Resources: 4,852 MMTOE I HIMALAYAN FORELAND Block offered: 1 Undiscovered Resources: 44.4 MMTOE

10 Offering large Petroleum Exploration License (PEL) under OALP Bid Round I Sq. Km Comparison of PEL/PML areas under operation and blocks offered under OALP Bid round 1 70,000 60,000 50,000 40,000 39,023 61,516 63,210 70,000 60,000 50,000 40,000 59, ,000 30,000 20,000 10,000 8,817 20,000 10,000 0 Nomination PSC - OALP (Round 1) PEL Area PML Area PEL area being offered under OALP Round I is ~60,000 sq.km and across 10 basins in India

11 OALP Bid Round I Biddable terms and Evaluation Criteria Parameter Originator Incentive Work Programme Commitment Revenue Share Score Description Available to the EoI submitting party only on a First Come First Served basis Evaluated based on four main criteria: o 2D Seismic surveys (LKM) 8 Marks o 3D Seismic surveys (SKM) 17 Marks o No. of exploratory wells 15 Marks o No. of core analysis wells (for shale resources) 5 Marks NPV of revenue share offered to the government based on the bid rates of LRP and HRP Discount Rate: 10% p.a.

12 Bidding Process and Important Dates Bid Process Important Dates for Round I Bidders to bid online at designated portal Hardcopy submission of all supporting documents to DGH Activity Date Launch GoI Approval DGH to submit bid evaluation reports to the Government for consideration Bid start date 18 th Jan 2018 Bid closing 3 rd April 2018 Award of contract after due approvals Award May 2018 User-friendly interface E-Bidding portal Transparent and Secure (STQC certified) Instruction to bidders on bid upload process Secure gateway - Digital Signature Certificate

13 Where Can You Find the Links to Important Documents Documents to be Launched Open Acreage Licensing Policy Procedures Model Revenue Sharing Contract Notice Inviting Offers Technical Booklet Links DGH India Website online.dghindia.org/oalp NDR Portal ndrdgh.gov.in E-Bidding Portal ebidding.dghindia.gov.in

14 Fiscally Competitive Projected Average Government Take for awarded contract areas under DSF Bid Round % Other Countries (Government take) 100% 100% 80% 60% 40% 20% 80% 60% 40% 82% 73% 68% 63% 58% 53% 38% 0% 20% 0% Royalty Government's Share of revenue (%) Total Government Take The average total government take from the total revenue for the 30 contract areas awarded under DSF Bid Round I is ~32% which is one of the lowest when compared to various other countries Source: KPMG in India Analysis, DGH, OGA, Wood Mackenzie, Note: 1) Royalty rates as applicable 2) Government s Share of revenue based on LRP +5% 3) The total government take does not include corporate / Sales tax

15 A Promising Investment Opportunity Low Demand Risk A ready market with robust oil & gas demand Low Market Risk Full marketing and pricing freedom for Oil & Gas Low Regulatory Burden Easy to administer revenue sharing contracts with operational autonomy to contractor Transparent and Full Availability of Data Large amount of data available (in NDR) for the Sedimentary basins Easy, fair and transparent access to Investors Low Government Take Governments focus on higher production and not higher revenue share

16 Thank You Directorate General of Hydrocarbons (Under Ministry of Petroleum & Natural Gas) Phone: , Fax: Website: dghindia.gov.in DGH DGH India

17 India is set for high and sustained growth in energy demand Future Energy Demand Outlook Total Primary Energy Consumption (MTOE) 1603 Import Dependency (%) % 10% Import reduction by % MMTOE MMTOE MMTOE Current O+OEG Annual Production ( ) Incremental Annual Production required by end of Annual Production Target ( ) India is the 3 rd largest consumer of oil and petroleum products after USA and China India s share of global demand is expected to grow from current 5.5% to 9% by 2035 Government aims at meeting a share of the increasing demand through domestic production and targets to reduce imports by 10% by 2022 As a result, India is taking several large scale initiatives to attract investments and increase domestic production Source : BP Statistics, DGH, KPMG in India Analysis Back

18 A National Data Repository (NDR) to assimilate, preserve and upkeep country's vast sedimentary data Back An integrated centralized data repository of the entire Exploration & Production (E&P) data of 3.36 million sq. kms. of Indian sedimentary basins Facilitate Global E&P Investors Support research in E&P domain Safeguard National E&P data asset Complement Digital India vision Total registered users 277 users from 85 Indian Companies & 86 user from 43 foreign Companies Total data orders delivered 123 orders from Indian and Global Companies

19 An investor friendly Open Acreage Licensing Programme (OALP) to boost domestic output Areas offered for submission of EoI under OALP 1 Degree X 1 Degree Map Data Available on NDR 1.76 million LKM of 2D seismic data 0.65 million SKM of 3D seismic data More than13,981 well logs & 11, 900 well header data Bidders can carve out their own blocks (min 10 x 10 Grid 336 Sq. Km) Total Area offered across 26 Sedimentary Basin Zone I (Sufficient Data) Zone II & III (Moderate to Sparse Data) * Area offered includes 7 producing areas Zone I: available for Petroleum Operation Contract only Zone II & III: available for Reconnaissance Contract and Petroleum Operation Contract Note Min. 1 X1 Grid allowed for adjoining areas to existing blocks and areas where it is not possible to carve 10X10 Grid Back

20 Back Blocks offered under OALP Bid Round I - Statewise State Approved Area (sq.km.) No. of blocks Rajasthan 8,674 8 Gujarat & Rajasthan 4,196 2 Gujarat 7, Andhra Pradesh 3,038 3 Arunachal Pradesh 73 1 Assam 2,251 5 Assam & Arunachal Pradesh 6,014 9 Assam & Mizoram 1,719 1 Assam & Nagaland 1,554 2 Tripura Tamil Nadu Uttar Pradesh 1,817 1 Himachal Pradesh Offshore Blocks 20,795 9 Total 59,282 55